10 Reasons Why You Should set up a business in the Netherlands

Discover the top 10 convincing reasons to start your business in the Netherlands. Explore the business-friendly environment, strategic location, and more.

Are you considering expanding your business internationally? That’s a smart move! But with so many prosperous countries, the Netherlands stands out as an excellent option. Why, you ask? The Netherlands offers a highly competitive business environment and a friendly atmosphere for entrepreneurs and boasts one of the best-connected networks in Europe. 

Plus, it’s got an appealing tax system, robust international trade opportunities, top-notch logistics, and a well-developed infrastructure that’s hard to match. This is thanks to the attractive incentives provided by the Dutch government and the country’s stellar performance in reputable global rankings and reports. 

If you’re thinking of making the Netherlands your business home, you’ve got plenty of compelling reasons to do so. Are you curious why you should kickstart your business journey in the Netherlands? Read on!

Stable Economy

The Netherlands boasts a robust economy characterized by a favorable business environment. With a GDP of $991.11 billion, it ranks among the world’s top 20 economies. The nation’s strategic location in Europe, well-developed infrastructure, and highly skilled workforce make it an attractive destination for businesses. 

The ease of doing business is evident in its high ranking on the World Bank’s Ease of Doing Business Index, often within the top 10. Furthermore, the Netherlands is a global leader in agriculture, technology, and logistics, further fueling its economic growth. This prosperous economy continues to thrive, attracting investment and fostering innovation.

Business Friendly Climate

The Netherlands is a top-tier destination for businesses worldwide. The Dutch economy is thriving, making the Netherlands the fourth-largest European Union (EU) economy. It consistently ranks among the best countries for business on prestigious lists like Forbes’ “Best Countries for Business,” currently holding the impressive 4th place. Moreover, it occupies the 4th position in the “Global Competitiveness Index” by the World Economic Forum. 

According to the World Bank’s Ease of Doing Business Report, 2022, the Netherlands held the 42nd position out of 190 countries, demonstrating its commitment to facilitating business activities. One key factor contributing to this success is the efficiency of the Dutch legal system. On average, it takes just 26 days to start a business in the Netherlands, compared to the global average of 20 days. Additionally, the Netherlands Foreign Investment Agency (NFIA) provides valuable support to foreign companies, simplifying establishing a presence in the country.

With over 8,000 foreign companies calling it home, it’s no wonder. But it’s not just big corporations; even small foreign entrepreneurs find success here. Surprisingly, the Netherlands boasts one of the highest incomes per capita in the entire EU, paired with low unemployment rates – a recipe for prosperity.

Access to European Markets

The Netherlands enjoys seamless access to the European Single Market and its extensive network of trade agreements, which dramatically facilitates business operations. As a member of the European Union (EU), the Netherlands benefits from the largest single market in the world, with over 445 million consumers. Approximately 70% of all goods imported into the Netherlands are destined for other EU member states.

Furthermore, the Netherlands has an extensive bilateral and multilateral trade agreements network. Notably, the country is a part of the European Free Trade Association (EFTA). It has various free trade agreements with countries outside the EU, such as Canada, Japan, and South Korea. These agreements make it easier for Dutch businesses to export their products and services, boosting the economy.

Favorable Taxation System

The Netherlands boasts a favorable taxation system, making it a magnet for businesses worldwide. With a corporate income tax rate of 19-25.8%, it remains one of the lowest in Europe. The Dutch government offers various tax incentives and deductions, further reducing the tax burden for businesses. 

Moreover, the Netherlands has an extensive network of tax treaties with over 90 countries, ensuring that businesses can avoid double taxation and benefit from reduced withholding tax rates on cross-border transactions. This makes it easier for companies to expand their global operations while minimizing tax liabilities.

Regarding VAT (Value Added Tax), the Netherlands applies a standard rate of 21%, which is relatively lower than some European counterparts. Additionally, businesses can often recover input VAT, enhancing their financial flexibility.

These favorable tax policies have had a profound impact on the Dutch economy. In 2022, foreign direct investment (FDI) in the Netherlands reached a staggering USD 40.8 billion, making it a preferred destination for international companies. The country’s strategic location, excellent infrastructure, pro-business environment, and tax advantages have made the Netherlands a hub for European headquarters and regional offices. Companies like Shell, Unilever, and Philips have established a strong presence here.

Highly Skilled Workforce

The Netherlands boasts a highly educated workforce, with many individuals holding advanced degrees. They’re not just educated but also exceptionally skilled in digital services. Additionally, the country is home to some of Europe’s top universities, including two renowned technical institutions. 

Businesses can readily find qualified workers with a low unemployment rate of around 3.57%. Moreover, the Dutch government provides incentives for hiring, making it even more appealing for entrepreneurs. In summary, the Netherlands’ skilled workforce and favorable employment regulations create an environment conducive to business growth and success.

This combination of knowledge and tech expertise makes the Netherlands a prime destination for businesses looking to tap into a talent pool that’s both brainy and tech-savvy.

Multiple Visa Options

The Netherlands offers attractive startup visa options that make starting a business remarkably accessible. Entrepreneurs outside the European Union can establish innovative businesses through the Dutch startup visa program. This initiative has gained significant traction in recent years, with over 1,000 startup visas granted annually.

One of the standout features of the Dutch startup ecosystem is its strong support network. The country boasts more than 30 incubators and accelerators, facilitating collaboration and growth. Additionally, Dutch venture capital investments in startups have soared, reaching €2.6 billion in 2022, illustrating the investor-friendly environment.

World-class infrastructure

The Netherlands boasts a world-class infrastructure that’s among the best globally. Holland’s logistics and technological setup are top-notch, with exceptional airports, seaports, and an extensive network of well-maintained roads and railways. These roads are renowned for their quality and upkeep, ensuring goods shipped from the country reach international destinations within an hour or two, making it an ideal hub for logistics businesses. 

Moreover, the Netherlands boasts a 100% digital telecommunications network, considered one of the finest globally. Thanks to its widespread infrastructure, lightning-fast internet connections are available to everyone, regardless of location or the path their goods take. 

Exceptional Quality of Life

The Netherlands boasts a remarkable quality of life characterized by an impressive life expectancy and a thriving, youthful population. With an average life expectancy of around 82.73 years, the Dutch enjoy a long and fulfilling life, thanks to their advanced healthcare system and healthy lifestyle choices.

Its youthful demographic sets the Netherlands apart, with a median age of just 42.5 years. This youthful population injects vitality into the workforce, making it an ideal environment for business growth and innovation. With 46% of the population aged between 25 and 54, the country benefits from a dynamic and highly skilled labor force.

In addition to its youthful workforce, the Netherlands is renowned for its business-friendly environment. It consistently ranks high in global ease of doing business indices. With a vital infrastructure, a well-educated workforce, and favorable tax policies, the Netherlands is a magnet for international entrepreneurs and investors.

Room For Innovation

In the Netherlands, innovation is not just encouraged; the government actively supports it. This forward-thinking country, known for its technological prowess, embraces both traditional and emerging industries. If you’re keen on innovation, the Netherlands offers an ideal environment to nurture your ventures.

The Dutch government has crafted a framework that extends a helping hand to startups and innovative companies looking to establish themselves in the Netherlands. They do this by providing access to government support and enticing tax incentives. One of these beneficial schemes is the WBSO, which rewards companies for their research and development efforts, including scientific research, creating innovative products, tackling significant technical challenges, and investigating various phenomena.

Moreover, startups receive additional tax relief, further boosting their growth potential. If your startup operates in sustainability, energy transition, food production, or healthcare sectors, you might be eligible for the Investment-ready Innovative SME program.

English Proficiency

The Netherlands is renowned for its remarkable multilingualism, a critical factor in facilitating smooth business operations. With a population of just over 17 million people, the country boasts an impressive linguistic diversity. Dutch, the official language, is spoken fluently by the majority. However, English is exceptionally well-known, with approximately 90-93% of the Dutch population speaking it proficiently. This high level of English proficiency has transformed the Netherlands into an international business hub.

The ability to communicate effectively in English has attracted multinational corporations, making it a thriving center for commerce. In fact, according to the EF English Proficiency Index, the Netherlands ranks consistently number 1 in global English proficiency indices, outperforming many countries where English is not the native language. This linguistic competence simplifies negotiations, fosters international trade, and ensures business transactions are easily conducted. 

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